8-22-11; Hut One, Hut Two, Hut What??? You can’t pay college football players if you understand the maze of U.S. human resources laws and rules including workers’ compensation coverage/cost

We read the news out of the University of Miami where another college football scandal has erupted just prior the first kickoff of this season. A convicted Ponzi-schemer named Nevin Shapiro pled guilty and basically ratted out any number of players to whom he provided lavish gifts as a “booster.” On August 16, 2011 in a jailhouse interview with Yahoo Sports writer Charles Robinson, Shapiro made good on his promise for the revelations exposing a lack of NCAA oversight which apparently allowed his illegal and unethical behavior to continue unimpeded for years. Thus far 72 athletes are alleged by Shapiro to have received "impermissible" benefits from him between 2002 and 2010. Various news outlets have speculated if the claims are true the NCAA could impose the death penalty on the Miami football program

One amazing thing we saw mentioned as a method to “cure” or end this problem is to make the players “professional” and give them a weekly or monthly stipend on top of tuition, room and board. Some members of the college sports press bring this concept up occasionally. As veteran defense attorneys, we want to make it clear the thinking on this concept is about as nutty as one can consider.

Please first note college football players are already given lots of “compensation” at a relatively high cost to the schools they attend. Schools like Notre Dame, Nebraska and Northwestern invest something like a quarter-million dollars just in tuition, room and board for each of their four-year scholarship athletes. On top of that, Division I schools provide trainers, travel, equipment, orthopedic surgeons and related facilities. While we hate to consider the possibility, there may be a crazed claimant attorney out there somewhere who could make a compelling argument the players are not as “amateur” as that title might otherwise indicate.

What is the problem with giving the kids a few bucks on top of all of it to keep them happy and possibly lower the chance future scumbags like Nevin Shapiro will tempt them? Well, human resources, including workers’ comp, benefits are a concern that could rapidly destroy college university budgets. If you made all of the football players at Northwestern “professionals” by giving them a salary of, for example, $500 per month, wouldn’t they be entitled to all the other rights and benefits of all university employees? Shouldn’t they have a right to pension coverage under ERISA? Wouldn’t they be similarly covered under ADA and FMLA? Would they be entitled to 100% coverage under workers’ compensation of all football-related medical problems—not just while they are athletes but for the rest of their lives? Would they get TTD? Would colleges and universities have to provide vocational rehabilitation? Would the injured player be entitled to permanent partial disability for loss of use of the leg, arm and foot?

Learn a lesson from Da Bears—WC in IL is Wildly Pricey when it comes to Football

Please note the Chicago Bears used to fight their workers’ compensation battles with very poor results. For one example, we remember a great player named Ted Albrecht who was a star tackle for the Bears. He was drafted in 1977 and played 5 years through the 1981 season. In 1982 he was injured in training camp doing exercises and never played again. He eventually retired and claimed his retirement was due to on-field injuries. The Bears asserted a football player could not reasonably have expected to hold his position for the foreseeable future. Ted Albrecht began a travel agency and worked as a sportscaster and earned about $80,000.00 annually—this was about 40% less than what he made as a football star. Albrecht claimed a wage differential award but it was denied by the Arbitrator, IIC and circuit court. They all felt a PPD award was appropriate. Nevertheless, the Appellate Court reversed and held Petitioner had a reasonable basis for assuming continued employment as a professional football player, ignoring testimony from the Bears general manager that the average career of an offensive lineman is less than 10 years. Despite solid income in his post-football career pursuits, in Albrecht v. Industrial Commission, our Appellate Court ruled he was entitled to 2/3 of the difference between what he was making as a Bear and the lower amount he was making as a travel agency owner and sportscaster for the rest of his life. If he is still receiving those benefits, we assure you it could have added several million to his post-Bear income.

At present, it is our understanding the Chicago Bears don’t truly “fight” their workers’ compensation claims any further—we haven’t seen any litigation from them in years. It is our understanding they basically budget for it and settle the exposures at the end of each player’s career.

Minimum WC Benefits in IL would be Expensive for College Programs

Along with all the HR rights outlined above and more, a “professional” college football player who would be moderately to seriously injured playing for or against any school at a game in Illinois would be entitled to our minimum benefits for amputation, total and permanent disability and death. That weekly rate is currently $466.13. For example, a 20-year-old halfback who suffered a significant injury and would be adjudicated totally and permanently disabled would receive no less than $466.13 weekly for life. On an annual basis, that benefit totals $24,238.76. Assuming a sixty-year life expectancy, the full undiscounted cost of such benefits is $1,454,325.60. On top of that amount, Illinois employers are required to contribute to a fund that pays COLA increases.

College football players could similarly make claims for “loss of trade” that is now so popular in Illinois “china doll” construction industry where virtually every claimant lawyer is now seeking six-figure benefits for the slightest elbow or knee surgery by claiming the worker is shut out of a lucrative trade even though the construction industry is at a complete halt in our state. We are seeing million-dollar demands for fractured ankles and elbow surgeries that completely heal—those are the sorts of injuries that happen every day on a Division I football field.

Please also note the injured football player would not have to be on an Illinois team—these benefits would apply to any injury occurring in our state regardless of which team the injured player was on.

In summary, we want our readers to understand the concept of paying college football stars might sound good but we hope the NCAA and the college presidents who run it understand they continue to get a pass on the human resources legal labyrinth in this country and they are best served to stay as far from it as possible.

8-16-11; Illinois Workers’ Compensation Commission may be shuffling and dealing a new deck next year

They haven’t posted this on their website just yet but lots of reliable sources are confirming these changes.

Effective January 1, 2012:

Illinois has something like 20 Downstate or “outstate” venues—this basically means hearing sites other than in Cook County.

Starting in January, we are advised this will dramatically change.

Downstate venues will be in 5 regions with 3 Arbitrators each, and the monthly call cycles for the downstate hearing sites are going back to three month cycles.

The three Arbitrators at each region will rotate from venue to venue to venue each month, however when a 19(b) is filed, the case will follow the Arbitrator.

Some of the regions:

·         Rockford, Woodstock and Waukegan

·         Peoria, Quincy, and a new location in Kewanee, Illinois.  

·         Wheaton, Geneva and Joliet.   

·         Unknown, but likely including Collinsville and Springfield (please note this is complete speculation based on call size and our state map)

·         Unknown, but likely including Mattoon and Urbana (please note this is also complete speculation based on call size and state map)

We are told one of the main hearing sites is in Kewanee, and it looks like current hearing sites in DeKalb, Rock Falls and Rock Island are being eliminated.

It is unknown whether the Chicago dockets will revert to three month call cycles.

We assume lots of sitting Arbitrators may be let go because Illinois has about thirty of them and if you do the math, they aren’t going to need nearly that many to staff these five regions.

Someday soon, we hope they get rid of the extra three Commissioners and their staffs that were added five years ago. As we have said on numerous occasions, if each of the 27 Commission hearing officers including attorney staff assistants decided one contested claim a week, they would have literally nothing to do in about three months. The addition of these three Commissioners in 2006 hasn’t led to rapid movement of claims.

We feel it is a shame to see the Arbitrators bearing the whole brunt of cost-cutting.

8-16-11; Whatever happens, in Illinois, workers get rich and business takes the hit--a recent multimillion dollar decision from southern Illinois reconfirms this state can be duplicitous...

A couple weeks ago, The Southern newspaper based in Carbondale, IL had an article with a headline about a Marion, IL man supposedly winning a $4.2 million dollar workers compensation “verdict.” The article (which can be found here: http://thesouthern.com/news/local/crime-and-courts/article_afad61d0-b8d5-11e0-87e6-001cc4c03286.html#ixzz1TPrLUXOK) was actually about a retaliatory discharge claim being handled in the state courts, but the basis for the claim did allegedly arise from a work-related injury.

We point out there is a double-standard in the Illinois courts when one compares claims for retaliatory discharge by employees with claims for workers’ comp fraud brought by Illinois employers. We consider both to create rights and duties ancillary to our workers’ compensation system.

We first point out retaliatory discharge is specifically prohibited by the Illinois Workers’ Compensation Act. From our view, any action for retaliatory discharge claimed by an employee against an employer should be heard by an Arbitrator or the Commission and not by the Courts. The Act specifically provides in Section 4 (h) as follows:

It shall be unlawful for any employer, insurance company or service or adjustment company to interfere with, restrain or coerce an employee in any manner whatsoever in the exercise of the rights or remedies granted to him or her by this Act or to discriminate, attempt to discriminate, or threaten to discriminate against an employee in any way because of his or her exercise of the rights or remedies granted to him or her by this Act. It shall be unlawful for any employer, individually or through any insurance company or service or adjustment company, to discharge or to threaten to discharge, or to refuse to rehire or recall to active service in a suitable capacity an employee because of the exercise of his or her rights or remedies granted to him or her by this Act. (emphasis added)

What this means is the Workers’ Compensation Act specifically estops retaliatory discharge. At present, despite the statute, retaliatory discharge is not a claim ever handled by the Arbitrators or Commissioners at the IWCC. Such claims are routinely handled in the Circuit Courts regardless of the statutory language above. Please note handling such claims in the Circuit Courts allows claimants to seek damages for “pain and suffering” which an Arbitrator would never consider. Such claims also allow for punitive damages, almost as a matter of right because retaliatory discharge is always brought with allegations of intentional acts by the employer. You can’t make a claim for punitive damages at the Illinois WC Commission.

In contrast, when an employer wants to sue employees for the clearest possible evidence of WC fraud, the Illinois Workers’ Compensation Act has provisions defining such fraud with language at least as clear as the statutory provisions above. Our Workers’ Compensation Act specifically estops workers’ compensation fraud. However, the Circuit and Appellate Courts, particularly in the First District, appear to be bowing to the interests of ITLA in stalling or otherwise remanding such issues to initial adjudication solely by the IWCC, despite the fact numerous Commission decisions say they won’t handle WC fraud claims. Please also note with the grindingly slow pace of some workers’ compensation litigation that can be controlled to a great extent by the claimant bar, strong evidence of workers’ comp fraud could languish as continuance after continuance is granted.

In contrast, Illinois courts have routinely held an action for retaliatory discharge can simultaneously be sought while the workers’ compensation claim is pending. In workers’ comp, what is sauce for the goose, isn’t always sauce for the gander.

How does the injured worker settle his WC claim, thereby giving up all rights under the WC Act and still pursue the employer for retaliatory discharge which is clearly proscribed by the same legislation?

What is even weirder about this ruling is our research indicates the WC claim was quietly settled years prior to the verdict reported above. If you go the IWCC website and look up claim 09 WC 23977, you will find the wildly aggrieved and now potential millionaire, Larry Holland accepted $17,460.75 or 7.5% BAW for his injuries and the Arbitrator approved it about two years before this verdict. From our review of the IWCC website, it does not appear there was anyone who represented the employer in that claim, leading us to believe the insurance carrier directly settled it. To veteran observers, this would appear to cause you to wonder where the multi-million dollar damages came from—the settlement contracts don’t actually point to the payment of any TTD or lost time. Arbitrators won’t approve settlements if claimants remain off all work due to their injury.

Right now, one of our defense competitors from southern Illinois is telling everyone on their website you can’t go after a claimant for WC fraud if you first settle their workers’ compensation claim, even on a disputed basis. Well, it appears there is no concern on the other side—clearly Larry Holland gave up “all rights under the Act” in settling his pending workers’ compensation claim. One has to wonder if the defense attorney who got whacked with the multi-million dollar verdict knew what rights were being given up when settling workers’ compensation claims at the IWCC.

For all the members of the claimant bar who are certain to write about the Illinois Supreme Court’s ruling in Kelsay v. Motorola—please note Plaintiff Kelsay in that claim didn’t first settle the workers’ comp case and waive all rights under the Act.

What does this mean for employers? A few things – most important, build your case carefully when you are thinking about terminating a person who has a pending workers’ compensation claim. You need a clear reason for the termination, something that is not “pretext” or a bogus reason. This will need to be something you would terminate any employee for, such as theft, failure to appear for work without a doctor excusing the no-show, etc. If you are going to use grounds that are less severe, make sure you have terminated other employees who did not have a pending workers compensation claim for the same purpose so you can be sure to point out those claims as well in any subsequent case.

If the employee is claiming termination was due to his injuries, please also ask the Arbitrator to hear the dispute and don’t settle it quickly and quietly. Fight such claims early and often and at every stage of the process. If the Arbitrator will hear it, it is much, much cheaper to litigate at the IWCC and you avoid the issues of “pain and suffering” and punitive damages as we outline above.

Please note the outcome above also reinforces the idea of insuring you obtain a release and resignation as a part of claim closure. We understand most insurance carriers are reluctant about handling it. We feel that is short-sighted and someone should ask the carriers how they insure you for the statutory language above but simultaneously wash themselves of such liability.

The release/resignation tool is useful in many situations, not the least of which being those where there has already been a termination, although they can cost a lot more in such cases. If you incentivize a claimant to sign off on a release and resignation, you are insulating yourself from any potential retaliatory discharge claims in the future. Often times this will purchase peace for both parties when any potential civil claim is in dispute or tentative. Other times, you can nip this type of claim in the bud by obtaining a release/resignation early if you press your evidence and say you intend to terminate based on said evidence. Always remember to carve out the WC claim on any release/resignation paperwork, as the IWCC needs to have approved settlement contracts on the WC claim in order for you to protect yourself fully from any further seeking of benefits. Please feel free to respond to us with any questions on this idea or for a draft version of a release and resignation. KC&A is happy to work with Illinois employers to tailor your release/resignations to specific claims and needs.